The inaugural Vail Global Energy Forum, held in early March at Beaver Creek’s Vilar Center, tackled all aspects of energy. In a wide-ranging discussion encompassing supply, demand, efficiencies and new technologies, one commodity received praise from diverse political, academic and industry speakers. That fuel was natural gas.

The forum was assembled by the Vail Valley Foundation and Precourt Institute for Energy at Stanford University to bring together a nonpartisan group of top thinkers in the energy space. It was deliberately designed to be affordable and accessible to the general public, and particularly to high school and college students.

Natural gas had clearly captured the hearts and minds of many in the line-up. Speakers returned often to the concept of natural gas as a bridge fuel, one that the nation can use to its great advantage on its journey toward a clean-energy future.

Former Secretary of State George Shultz spoke on his vision for energy. Shultz said that the world is on the cusp of a genuine energy revolution, and it stems from hydraulic-fracturing technology. Indeed, fracing technology is fostering a geopolitical revolution, as countries that have depended on very high prices and a monopoly on prices are feeling the ground shift.

Two battles must be won on the political front, in Shultz’s view. The first battle is to see that hydraulic fracturing is used, and that it is used responsibly. The second involves research and development. “We have to keep R&D going in a strong and sustained way. This is a political issue we have to win.”

Colorado Governor John Hickenlooper noted that the top two issues that occupy governments and elected officials are jobs and energy.

“Everyone everywhere wants a full-time job, and a lot of these jobs come out of energy,” said Hickenlooper. Colorado was held up as an example of a pro-business and pro-energy state that at the same time is committed to environmental protection.

Throughout Colorado, and indeed across many American states, natural gas supplies have grown spectacularly, thanks to the innovative uses of horizontal drilling and fracturing technologies. “This will dramatically reduce our dependence on traditional supplies,” said Hickenlooper. Natural gas has many positives: it is cleaner and less expensive than other energy sources, it can create jobs and it can keep money home in the U.S. by displacing foreign energy supplies.

The governor addressed public suspicions that swirl around hydraulic fracturing: “There is misinformation about frac fluids being pushed into groundwater.” The state has wrestled with questions around how trade secrets and the environment can both be protected, but after a collaborative effort between industry, regulators and the public, Colorado recently enacted the most transparent frac-fluid disclosure rules in the world.

Ernest Moniz, professor of physics at MIT, presented results of an extensive study of natural gas conducted at the university. He anointed natural gas as a critical component of the future energy mix as natural gas first displaces coal before it is then displaced by other, cleaner options.

No evidence of groundwater contamination from fracturing operations was found in thousands of well completions that MIT studied, said Moniz. Oil and gas drilling are heavy industrial processes, so environmental impacts are present. However, in the MIT study, about one-half of environmental complaints were due to poor well completions and one-third to issues with management of waters at the surface. “These issues are completely manageable,” said Moniz, “but they are challenging.”

“Unconventional sources give us breathing room and flexibility,” said Tom Petrie, vice chairman, Bank of America Merrill Lynch, and co-founder of Petrie Parkman & Co. While a portfolio of options will be needed to address future energy-supply concerns, the new reality is that supplies have been significantly enhanced by unconventionals. By 2034, unconventional gas could comprise almost half of total U.S. supply.

“The timing could not be more fortuitous,” said Petrie. “We thought we would need to import 10 billion cubic feet (Bcf) a day. Now we could have another 25 Bcf per day in incremental capacity. That can be used in power generation to reduce our dependence on coal.”

For more on natural gas supply and demand, see OilandGasInvestor.com.

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